House prices rebound in January, according to Halifax

on Feb 5, 2015
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Between the end of November and the end of December last year, mortgage approvals increased by two per cent on the prior period to 60,275 in total, having previously fallen for five successive months. This turnaround in the rate of mortgage approvals may have contributed to an increase in house prices for January, which also rose by two percent from on the prior month, according to new data released by Halifax.

Martin Ellis, a housing economist with Halifax, believes that reductions in mortgage interest rates, increased savings for many homebuyers due to stamp duty reform, and an increase in the average weekly earnings of the labour force may likewise have contributed to an upswing in house prices.
Throughout 2015, economic growth and low central bank interest rates are expected to produce a continuing upward trend as regards residential property prices. Halifax also expects households to have more money, and thus greater spending power, as Britons benefit from low consumer inflation and fuel cost reductions. expectation is for house prices to keep increasing in 2015, though at a slower rate of between three and five percent.

While the figures released by Halifax are generally positive and its prognosis for the rest of 2015 is for modest growth in the housing market, other analysts see things differently. Howard Archer, chief UK and European economist with IHS Global Insight, writes:
“The 2.0% jump in house prices reported by the Halifax is hard to explain, and looks markedly at odds with other latest data and survey evidence.”

Indeed, peer Nationwide recently published data indicating growth in residential property prices somewhat at odds with that of the Halifax figures, with the January increase in house prices at just 0.3 percent.
Whilst it’s difficult to understand the disparity between the Nationwide and Halifax data sets, the outlook as seen by both financial institutions is one of growth based upon positive economic forecasts.

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